In Wednesday's Asia papers

A summary of political, economic, trade, business and product news affecting the chemical and related industries.

 

International Economics & Politics

 

Asia Pacific govts committed to Iraq deployments 

 

Asia Pacific governments have pledged to keep their troops in Iraq, but the escalating violence, new al-Qaeda threats and strong public opposition are beginning to cause jitters in the US-led coalition. Until now Australia, New Zealand, the Philippines, Singapore, South Korea and Thailand have insisted they will not withdraw despite indications the security situation is spinning out of control. But last week's Nasiriyah bombing which left 19 Italian police dead, and al-Qaeda's threat against US allies Britain, Italy, Australia and Japan, including an explicit warning to Tokyo not to send troops, is testing their nerves. On Tuesday (18 November) the first serious crack in resolve came when President Gloria Arroyo of the Philippines said troops would be pulled out swiftly if their safety was threatened. Japan was expected to send an advance party of 150 troops by this year end, followed by another 550 in early 2004, but a day after the Nasiriyah bombing it toned down its pledge on the first wave. Thailand has also seen fiery debate over the deployment of more than 400 troops including engineers and medical teams to the central city of Karbala, and calls from the upper house Senate for a complete withdrawal.

Channel News Asia, Singapore (online edition)

 

Nihon Keizai Shimbun, Japan (online edition)

 

Manila Times, Philippines (online edition) 

 

Japan to join Asean amity, cooperation pact

Japan told the Association of South-east Asian Nations (Asean) at talks in Tokyo ending Tuesday (18 November) that it will sign the Treaty of Amity and Cooperation in Southeast Asia (TAC). Deputy Foreign Minister Hitoshi Tanaka told Asean representatives that Japan is ready to make arrangements for signing the treaty. Separately, Chief Cabinet Secretary Yasuo Fukuda said at a news conference that Japan's decision is in response to strong calls from Asean members to join the 1976 pact and to Tokyo's consideration of the history of close ties with the regional grouping. Fukuda downplayed the possibility that Japan's joining of TAC could affect the Japan-US security treaty. The Asean-initiated treaty is a regional pact in which signatory states pledge respect for the independence, sovereignty and territorial integrity of all countries. Asean amended the pact in 1998 to allow non-Asean countries to join, and China, India and Papua New Guinea recently signed it.

Nihon Keizai Shimbun, Japan (online edition)

US orders quotas on Chinese textiles

A new trade row erupted as Washington announced quotas on Chinese textiles after finding that US textile producers have been hurt by a flood of subsidised imports. A US trade panel examining a complaint from the US textile industry called for 'safeguard' relief against Chinese-made knit fabric, dressing gowns or robes, and undergarments, the Commerce Department said. The petitions were filed by the industry under a provision of China's accession agreement to the World Trade Organization (WTO) that allows the US and other WTO members to impose temporary quotas on textile imports from China in the event those imports are found to cause market disruption. The action roiled financial markets, sending the dollar into a tailspin and fueling a spike in oil prices as investors feared a move toward protectionism. The action came just a week after US tariffs to protection its steel industry were ruled illegal, leaving Washington in a dilemma.

 

Channel News Asia, Singapore (online edition)

 

China Daily, China (online edition)

 

 

Bilateral cooperation got a boost when Singapore and China launched a joint council to promote political and economic cooperation on Tuesday (18 November),  the first day of Prime Minister Goh Chok Tong's working visit to China. Its efforts will focus on human resource development, the exchange of visits, the Suzhou Industrial Park, exchange of high-technology research and expertise, developing China's western region and helping Chinese companies go global. Deputy Prime Minister Lee Hsien Loong and Chinese Vice Prime Minister Wu Yi will co-chair the council. It was launched after Singapore signed a memorandum of understanding (MOU) with China at the Great Hall of the People on the same day. Three other MOUs will make for regular and structured exchanges of senior officials, and start economic and trade councils with Zhejiang and Liaoning provinces.

 

 

 

 

China's fixed asset investment in October rose 22.6% from a year ago but the growth rate was the lowest in 2003, the National Bureau of Statistics said on Tuesday (18 November). Fixed asset investment, a measure of spending principally on infrastructure and other economic facilities, rose to Rmb395.4bn ($47.8bn/Euro39.6bn), the bureau said in a statement. The massive influx of cash has been central to what many economists are beginning to call an overheated economy and the slowdown in October may reflect government efforts to slow the expansion, including central bank measures to temper rapid credit growth. The growth rate in October was 3.9 percentage points lower than in September, with slowdowns across the board, including real estate, infrastructure and technology upgrading. Fixed asset investment in the first 10 months of the year rose 30.2% to Rmb3.05trn, slowing from the 31.4% growth seen in the first nine months of the year.

 

Business Times, Singapore (online edition)

 

China Daily, China (online edition)

 

North Korea told energy project suspended

 

The head of a US-led consortium in charge of building nuclear power plants in North Korea, said he has told communist officials about the plan to suspend the energy project. Charles Kartman, executive director of the Korean Peninsula Energy Development Organization (Kedo), arrived in Seoul to brief South Korean officials on his three-day trip to North Korea. Officials said the consortium made up of the US, Japan, South Korea and the European Union would make an announcement on Friday (21 November) on a one-year suspension of the $5bn (Euro4bn) project. Kartman said he had "useful" talks with North Korean officials including North Korea's atomic energy bureau chief, Choi Chul-Su. North Korea threatened last week to impound all materials and technical documents at the reactor site in North Korea's remote northeast coastal village of Kumho, demanding US compensation for the suspension of work. The US said North Korea has run a secret uranium-enrichment program and violated a 1994 agreement to build two 1000-megawatt nuclear reactors in the impoverished communist state. While Pyongyang denies the claims, Washington suspended heavy fuel supplies to the North in November, 2002. Under the 1994 pact, the US is supposed to meet North Korea's energy needs while the reactors are being built from a fund largely raised by South Korea and Japan.

 

Channel News Asia, Singapore (online edition)

 

Korea Herald, South Korea (online edition)

 

IMF optimistic about South Korean economy

 

The International Monetary Fund (IMF) said an economic recovery is on its way in South Korea where growth is expected to reach 4.75% next year, the fund's Asia-Pacific chief, Joshua Felman said. The statement followed policy consultations between an IMF team and South Korean economic officials. Felman, however, said South Korea should step up corporate reforms to curb the practice of conglomerate owners exerting more control over a company than their share holdings warranted. Critics said top conglomerates in South Korea are still engaged in cross-unit transactions to subsidise weaker operations, although the extent of such illegal activities has fallen sharply compared to previous decades. Felman urged South Korea to maintain supportive macro-economic policies saying its current fiscal deficit should be eliminated. He called for the early sale of government holdings in three investment trust firms: Hyundai Investment Securities, Korea Investment Securities and Daehan Investment Securities.

 

Channel News Asia, Singapore (online edition)

 

Korea Herald, South Korea (online edition)

 

Indon FDI up 37% on new investment status

 

Approved foreign investment in Indonesia rose sharply in the first ten months of the year to $9.31bn (Euro7.72bn) from $6.81bn a year ago, the National Investment Coordinating Board said in a report seen on Tuesday (18 November). However, the 37% rise was largely due to a change in investment status of many projects rather than new projects, the board said.  It said the government approved a change in status of 99 domestic investments into foreign direct investment (FDI) projects worth $3.77bn during the period, compared to 98 projects worth $1.21bn a year ago. New FDI approvals rose to $4.59bn involving 726 projects, against $4.11bn involving 898 projects a year earlier.

 

Business Times, Singapore (online edition)

 

Jakarta Post, Indonesia (online edition)

Philippines mines sector interests investors

Foreign investors from at least six countries are interested in pouring in billions of dollars in the country's mining industry, the incoming president of the Chamber of Mines of the Philippines said. Benjamin Philip G Romualdez, who is also the president of the mining giant Benguet, claimed that investors from India, South Korea, Japan, China, Australia and Canada have been planning to conduct exploration activities in the country for the prospects of gold, copper, nickel and zinc. In particular, mining firms from India are looking at exploring the country for copper, while Korean companies are keen on mining copper, nickel and zinc, Romualdez said.  Japan, he added, has a large demand for copper while China has a rising requirement for steel. Australian and Canadian firms, some of which have already established their presence in the country, intend to pour in more investments in gold, copper, nickel and chromite projects, Romualdez said.

Manila Times, Philippines (online edition)

Energy

 

Malaysia still mulling privatising Bakun project

Malaysia's new Prime Minister Abdullah Ahmad Badawi said on Tuesday (18 November) the government would proceed with the huge Bakun hydroelectric dam in eastern Sarawak state but had not decided whether to privatise the project.  The government took over the controversial 2400 megawatt Bakun scheme on Borneo island and revived it in 2001 after it was shelved during the 1997-1998 Asian financial crisis when the main operator fell into debt. Tycoon Syed Mokhtar Albukhary has made a bid for the project, with his GIIG Capital signing a pact in August to buy a 60% stake in dam operator Sarawak Hidro from the Ministry of Finance for RM945.42m ($248.8m/Euro204.5m). The move aims to ensure power supply to a $2bn aluminum smelter to be developed by GIIG in Sarawak by 2007. But sources said the agreement had lapsed because GIIG failed to fulfill certain conditions by mid October. Other companies were said to have submitted new project proposals to the government. They include a joint-venture between Malaysian Resources Corp and Sweden's Asea Brown Boveri, which proposed reviving plans to build 1600 megawatt submarine cables at a cost of $2.4m to transfer power to peninsular Malaysia, it said.

Business Times, Singapore (online edition)

Environment & Health

Methane-gas to improve coal-mine safety

The Chinese Government will invest Rmb2.2bn ($265m/Euro220m) in 2004 to enhance safety at the country's coal mines. The funds will improve the release of deadly methane gas, allowing it to drain deep from below underground coal beds through discharge systems. The improvements are a bid to better use the methane as an energy resource rather than send it straight into the air where it can cause global warming. The gas can also cause deadly explosions, a frequent problem throughout China. This year's investment for the same purpose totalled Rmb2bn, according to Fan Weitang, chairman of the China National Coal Association, who spoke on Tuesday (18 November) at the opening of the Third International Methane and Nitrous Oxide Mitigation Conference in Beijing. Methane, as well as nitrous oxide, are two greenhouse gases that are considered responsible for heating up the earth's atmosphere. In another move, officials said Rmb1bn in treasury bonds have been allocated this year to help some 1.2m rural families develop methane ponds.

China Daily, China (online edition)

 

Chemical clean-up starts

 

Nearly two tonnes of dangerous chemicals have begun to be cleaned up from a tanker over the weekend (15-16 November) in Shenyang, capital of Northeast China's Liaoning Province. Liaoshen Evening News in the provincial capital reported that the tanker, which was carrying at least 50 tonne dangerous chemicals, got stuck near a tollgate on the Shenyang-Harbin expressway on Saturday morning on its way from Jilin Province to Fushun in Liaoning Province. The lopsided tanker was leaking noxious liquid onto the ground, near two petrol stations. The chemical, called Methye acrylate, is flammable, toxic and volatile, experts said. Nearby residents said that after smelling the chemicals, they felt dizzy and had sore throats and red, swollen eyes. Local firefighters, police and officials from the environmental protection department arrived at the scene and cordoned off 300 square metres around the area.

 

China Daily, China (online edition)

 

Technology

 

IDC: Asia's IT bioscience to hit $3bn by '07

 

The Information Technology R&D sector of Asia's bioscience industry is expected to grow from $531m (Euro440m) to at least $3bn by 2007, an independent report said on Tuesday (18 November). Research house International Data Corp (IDC) said R&D in bioscience, or life sciences, had weathered recent global economic woes relatively well and was poised to take advantage of the expected upturn. The report said that, based on global forecasts, the IT life sciences market in the Asia Pacific, excluding Japan, would expand at an annual compound growth rate of 39% to reach more than $3bn in 2007.

Business Times, Singapore (online edition)

Oil & Gas

 

ConocoPhillips to restore partial Indon gas flow

ConocoPhillips is expected to increase natural gas pressure in the leaking 640-mile pipeline from Indonesian West Natuna gas field to Singapore to over 50% of the previous flow rate within the next 24 hours, Jim Taylor, the company's vice president of operations, said on Tuesday (18 November). ConocoPhillips has isolated the leak in the pipeline from one of the gas supply sources and repair work began Tuesday. Singapore's SembCorp Gas was receiving 325m cubic feet/day of gas from the West Natuna field prior to the supply disruption that began early Saturday.

Jakarta Post, Indonesia (online edition)

Apollo goes for a JV with Michelin

India's Apollo Tyres on Monday (17 November) announced that it has severed ties with long-time technology partner Continental of Germany and is now setting up a new joint venture company with the France-based Michelin for producing a range of truck and bus radial tyres in India. In addition, Michelin has purchased 14.9% equity in Apollo Tyres for $28m (Euro23m). With that, Michelin will now get two representations on the Apollo Tyres board. Michelin will hold 51% stake in the new JV, with the rest to be held by Apollo Tyres. The venture, Michelin Apollo Tyre, is currently scouting for a location to establish its new facility, which will be operational by September 2005. The partners plan to invest $70m over the next four years for setting up the new facility as well as expanding production.

 

Times of India, India (online edition)

 

Company News

 

Shin-Etsu Polymer unit mkts room for mentally ill

Shin-Etsu Unit, a subsidiary of Shin-Etsu Polymer, has commercialised a patient room for mental hospitals. The room's layout can be easily changed into one of five patterns as needed depending on the patient's symptoms. A patient monitoring system is also built-in. The room will cost up to Yen10m ($95 600/Euro63 800). Shin-Etsu Unit expects demand for it to grow as mental hospitals constructed during a building boom in the 1970s and 1980s are remodeled and modernised.

Nihon Keizai Shimbun, Japan (online edition)

Kohap sells off Indonesian plant

Creditors of troubled Kohap Corp sold the company's plant in Indonesia to a subsidiary of SK Chemicals for $18m (Euro15m) on Tuesday (18 November), bank officials said. Kohap Indonesia was sold to a consortium led by SK Keris. Kohap's Indonesian factory, which mainly produces polyester, was put up for sale last April. Creditors are also pushing for the sale of Kohap's three remaining plants. A producer of synthetic fibres and chemicals, Kohap has been undergoing a creditor-initiated debt workout program.

Korea Herald, South Korea (online edition)

BCP's plan for Baht19.5bn debt revamp

Thailand's Bangchak Petroleum  (BCP) said it will soon submit a plan to restructure its Baht19.5bn ($487.5m/Euro404.6m) debt to the cabinet for consideration and for execution before of the year-end. Pichai Chunhavajira, who chairs the debt restructuring committee, said the plan involves refinancing a Baht7bn debt previously guaranteed by the government. The company will also seek a  long-term loan worth Baht8.5bn, and to use the firm's goods stockpile as collateral against a further Baht4bn debt from a local financial lender to shore up BCP's working capital. Of the total debt, Baht13bn are in short-term loans and the rest are medium term loans, said Pichai.

Business Day, Thailand (online edition)

(Some stories may not appear in all editions of the cited news media.)